The following extracts from an SMH story today have the feel of a set-piece comment on the likely impact of point-of-consumption taxes on race-betting and other gambling turnover.

Many would be interested to know what professional stock-market analysts are saying about the implications for Tabcorp and more generally what responses the 'corporates' may be planning to avoid and evade such imposts on their operations.

[The new tax] will help ensure a well-regulated and sustainable wagering sector.’

Tabcorp spokesman

Online taxes to squeeze foreign bookmakers

Online betting revenue will now be taxed at the point-of-consumption.

A series of new digital betting taxes set to crimp the profits of online bookmakers in Australia is expected to force an acceleration of the wave of consolidation sweeping the fiercely competitive online gambling sector.

Online bookmakers are bracing for the so-called “point-of-consumption” taxes beginning in NSW, Victoria, Western Australia and the Australian Capital Territory today, which, for the first time, will tax digital gambling losses based on where a bet is placed rather than where the bookmaker holds its licence.

The new taxes, already operational in South Australia and Queensland, come in response to long-held concerns of state governments, TAB operator Tabcorp and the pubs lobby that the nation’s largely foreign-owned online gambling services – including Sportsbet, BetEasy, Ladbrokes and Bet365 – have not been contributing their “fair share”.

The new taxes were needed to level the playing field, they argued, as most of Australia’s online bookmakers held licences in the lowertax Northern Territory despite operating nationally, meaning they paid vastly less tax than state TABs.

“Tabcorp has supported the introduction of point-ofconsumption taxes and has worked with governments and the racing industry to ensure that the significant fees and taxes we already pay under our state licences are recognised,” a Tabcorp spokesman said yesterday. “The introduction and commencement of point-ofconsumption tax regimes will help ensure a well-regulated and sustainable wagering sector.”

How can Tabcorp justify a PoC tax on some punter who wants to back Nicole Kidman to win an Oscar or Malcolm Turnbull wanting to back the ALP to win the upcoming federal election ?

That punter might be an avid moviegoer and never been a horse racing punter or Malcolm Turnbull wanting to pick up a few easy dollars yet, Tabcorp suggests, "The introduction and commencement of point-of-consumption tax regimes will help ensure a well-regulated and sustainable wagering sector.”

Governments, under pressure from guess who, attempting to salvage a sinking ship.

PoCT is levied on ALL bookies' Gross Profits, payable to the state govt where that profit is generated . . But with a threshold which excludes smaller bookies

What Bubba is pointing out, is that the corps will recoup the tax liability by framing their markets at a higher 'over-round'

And what I was pointing out was that the small country bookies will find it a bit easier to match the corps prices . . obviously their costs to turnover ratio is way out of whack with that of the corps, and they are slowly bleeding to death . .

Of course the little blokes need to somehow get punters back to the track

So in some ways the NT government finally gets penalised for their tax haven to the corporates.

It might be less margin for the corporates but it also means that they have to be competitive in the long run otherwise punters will go back to paramutual betting. A national pool will also help competitive betting as corporates have to beat it with fixed odds rather than mid tote and low fixed odds as they do most days.

PM, ask yourself this question, do you think every corporate will cannibalise the odds etc.

People shop around in real life for all products. It will be the same and in a few years, the only ones left will be the ones who offer the good odds.

The big loss for the corporates is the fact if the odds are crap, people will bet with the tab so all the adverts etc will be in waste and will be a spiral to oblivion. This is why most won’t make crap odds. It will just be a reduced profit.

NT government will also know some corporates will walk away in the long term so they will be losing licensing revenue. The interesting part will be if some corporates make sweetheart deals with different states.

In the past at least 1 bookie has written out fake 500/1 tickets on short favs to transfer liabilities giving the bookie a net benefit somewhere. Even if its only a bad debt being reduced to nil so the tax man gives back some of the debt instead.

It is rare for a corporate to offer better odds than TABs in the pre-post market.

The sensible strategy for corporates is to offer marginally better odds than the TAB -- and that guarantees them a profit, given that the TABs are paying 16% and constraining the fixed-odds odds to cover that.

A tacit agreement among corporates to do this is sensible and a no-brainer.

Now that the corporates have driven out the old-style bookmakers it is a nonsense that their presence is still tolerated -- especially when they can close customer accounts at will.